Banks Will Face Competition in the RDC Space

Third parties that can decouple remote deposit capture from the deposit relationship may pose a threat to banks in the payments space.

As remote deposit capture (RDC) matures, more and more banks are beginning to realize its offensive potential. How can banks use RDC as a competitive differentiator, and can it actually drive growth? And what are the technology requirements for a successful RDC strategy?

Banks with remote deposit capture (RDC) aren't really selling RDC -- they are trying to get prospective customers to move their banking relationship and set up a new deposit relationship.

When banks try to attract new customers, they're selling their bank and not RDC because they require you to open up a new bank account. The consumer or business needs an incentive to move an account to a new institution. But banks face a risk of third parties coming in that don't sell RDC in a way that requires you to move your banking relationship -- they don't care where you bank; they sell purely a payment product.

My sense is those selling payment products alone with strong reporting and strong value propositions and reasonable pricing will be strong competitors and may have an advantage over banks. In the long run, if banks are to really play in this marketplace, they need to decouple their payment products from their deposit relationships and sell payment products that give them a relationship and an entrée with the customer and, in the long run, give them a way to move the relationship.

RDC can absolutely be a growth/revenue generator. But the next phase of RDC will see new entrants, and banks will really have a battle on their hands.